This study considers the conditions under which China’s massive internal migration and urbanisation have resulted in relatively governed, less contentious, and yet fragile migrant enclaves. Shenzhen, the hub for rural-urban migration and a pioneer of market reform, is chosen to illustrate the dynamics of spatial contestation in China’s sunbelt. This paper first correlates the socialist land appropriation mechanisms to the making of the factory dormitory and urban village as dominant forms of migrant accommodation. It then explains how and why overt contention has been managed by certain intermediate agencies in the urban villages that have not only provided public goods but also regulated social order. It ends with an evaluation of the fragility of urban villages, which tend to facilitate urban redevelopment at the expense of migrants’ living space. The interplay between socialist institutions and market forces has thus ensured that migrant enclaves are regulated and integrated into the formal city.